NZ manufacturing keeps growing in December quarter, rundown in stocks bodes well for 2013
New Zealand manufacturing volumes continued to grow in the final three months of 2012, and a rundown in stocks outside food and beverage bodes well for the sector this year as construction gets underway in Canterbury and Auckland.
Total manufacturing sales volumes rose a seasonally adjusted 1.5 percent in the three months ended Dec. 31, slowing from a 2.5 percent gain in the September quarter, according to Statistics New Zealand. The value of manufacturing sales was flat at a seasonally adjusted $22.85 billion. Volumes were up 5.7 percent from the same period a year earlier, while values were down 0.7 percent on an annual basis.
Metal product manufacturing sales volumes rose 5.4 percent, and values climbed 6.6 percent to $2.31 billion, leading gains in the quarter. Petroleum and coal product manufacturing sales volumes gained 6.4 percent and values were up by the same amount to $1.92 billion.
Meat and dairy manufacturing, which accounts for 30 percent of the sector, showed a 1.1 percent fall in volumes and a 4.4 percent decline in sales to $6.86 billion.
"While still an increase, this is something of a reversal from the previous quarter, when high meat and dairy manufacturing sales more than compensated for falls in other manufacturing industries," industry and labour statistics manager Blair Cardno said.
Stripping out the meat and dairy sectors, manufacturing sales volumes rose 1.3 percent and sales were up 1.8 percent to $15.99 billion. The volume of closing stocks of finished goods shrank 6.8 percent in the quarter, and was down 2.9 percent from a year earlier.
Doug Steel, economist at Bank of New Zealand, said the increase in volumes continued the trend of the past three quarters, though "prices were not all that flash."
"The rundown in stocks give you a bit of optimism for 2013 if demand does strengthen on construction," he said.
The official government figures come the same day as a New Zealand Manufacturers' and Exporters' Association survey showed an increase in export sales in January compared to a year earlier.
The NZMEA has been a vocal critic of the government and Reserve Bank for not providing more support for local firms competing with cheap imported rivals and reduced competitiveness abroad due to the strength of the currency.
Last month, the Bank of New Zealand-Business NZ performance of manufacturing index showed the sector grew at its fastest pace in eight months in January, with the strongest growth in Canterbury/Westland probably reflecting demand for building materials.
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